Rising geopolitical uncertainty and a defensive tone in U.S. equities are dampening risk appetite, prompting some analysts to warn that markets may need to revisit their 2024 lows before establishing a more durable recovery.
Cryptocurrencies saw a modest rebound during Asia’s Friday session, with bitcoin climbing back toward $68,000 after a volatile week that tested sentiment across broader risk assets.
Gains were spread across much of the market. XRP, Solana’s SOL, DOGE and Cardano’s ADA advanced up to 2%, while ether lagged, slipping slightly and remaining below the $2,000 threshold — a level traders appear focused on defending rather than celebrating as a breakout.
The move resembled a relief rally more than a decisive shift in trend. In recent weeks, price action has been characterized by sharp swings: brief rallies attract dip buyers, only for selling pressure to emerge near levels where previously trapped investors can exit with reduced losses.
That said, each rebound this week has appeared marginally more resilient, suggesting forced liquidations may be easing, even if strong conviction buying has yet to return in meaningful size.
Macro dynamics and geopolitical developments continue to weigh on sentiment. Gold steadied near $5,000 an ounce following two sessions of gains, reflecting investor caution amid heightened Middle East tensions.
U.S. President Donald Trump said Thursday he would allow 10 to 15 days for negotiations over a potential nuclear agreement with Iran, while reports indicated an increased American military presence in the region. The backdrop has reinforced demand for safe-haven assets and complicated efforts by risk markets to build sustained momentum.
Wenny Cai, COO at SynFutures, said traders are reassessing the outlook after the latest Federal Reserve minutes struck a more hawkish tone, even if further rate hikes are not currently the central expectation.
“The shift is not that rate hikes are imminent,” Cai said, “but that policymakers have clearly left the door open should inflation fail to cool, which effectively raises the bar for near-term easing.”
That repricing has supported the U.S. dollar and tightened financial conditions at the margin, she added, a dynamic reflected in softer equities and renewed interest in cash-like instruments and short-duration Treasuries.
Alex Kuptsikevich, chief market analyst at FxPro, maintained a cautious stance. Given prior market structure and the increasingly defensive tone in U.S. stocks, he said the probability of a retest of local lows — levels last seen in the latter half of 2024 — has increased.
On ether, Kuptsikevich noted that the token remains perched on a long-standing support line dating back to 2020, aligning near the $2,000 area. However, a confirmed breakdown would likely require a decisive drop below recent lows around $1,500.
On-chain data points to potential overhead supply. CryptoQuant reported that bitcoin inflows from large holders to Binance have climbed to record levels, a pattern that can precede heavier spot selling.
Research firm K33 has compared current conditions to the late stages of the 2022 bear market, which eventually transitioned into an extended period of consolidation.
For now, the crypto market appears capable of staging rebounds, but converting those moves into a sustained uptrend remains a challenge. Until spot demand clearly outweighs supply near key psychological levels, rallies may continue to struggle for follow-through.
